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Regulators could consider adopting the following six good practices:

Organization of Exchanges and Exchange Groups

  1. Assessing the organizational structure of the exchanges under regulators’ supervision in order to ensure that decision-making autonomy and independence regarding the discharge of exchanges’ regulatory obligations including ensuring market integrity practices and controls are maintained at the level of the individual exchange, subject to domestic legal and regulatory requirements and regulatory discretion, even if the exchange is part of an Exchange Group;
  2. Assessing whether exchanges under regulators’ supervision have put in place arrangements and policies to ensure that the exchanges operate in compliance with their respective regulatory obligations. In particular, assessing whether individual exchanges, which are part of an Exchange Group, have sufficient expertise and knowledge on their own, to remain in control of any decision-making related to regulatory compliance;
  3. Assessing whether there are any potential conflicts of interest that may arise due to exchanges being part of an Exchange Group and in managing its commercial interest and regulatory obligations;

Supervision of Exchanges and other Trading Venues within Exchange Groups

  1. Assessing whether exchanges under their supervision establish effective arrangements for market operations, including conflicts of interest management, corporate and operational governance, and promoting transparency of trading. Regardless of the nature, size, or complexity of the trading venue, it is important that regulators consider monitoring whether supervised exchanges have in place processes to deal with the evolution of their corporate structure and the potential conflicts of interest arising from it;

Supervision of Multinational Exchange Groups

  1. Having regard to domestic legal and regulatory requirements, making use of mechanisms such as ad hoc cooperation, MOUs, supervisory colleges, and regulatory networks as considered under previous IOSCO reports, to facilitate and support supervision and supervisory cooperation; and 6. Monitoring developments in the structure and ownership of the exchanges and Multinational Exchange Groups to ensure that they continue to have the ability to supervise exchanges and trading venues that operate in their jurisdictions adequately.